Texas Releases CSCOPE Audit: The Money Didn't Add Up

The long awaited CSCOPE audit report was released on June 9, 2014 following an 18 month investigation by the office of Texas state auditor John Keel.

In his overall conclusion, Keel stated that during the 2012-13 period, the 20 education service centers in Texas provided access to a curriculum management system known as CSCOPE to 70 percent of school districts in the state, according to information from the Texas Education Service Center Curriculum Collaborative (TESCCC).

These education service centers reported they collected $73.9 million from public school districts, private schools, and charter schools from Sept 2005 through August 2013 for CSCOPE services for these schools. However during that same period, the education service centers reported expenditures to be 67.8 million.

The 55-page report highlighted all of the discrepancies that the state auditor’s office (SAO) uncovered including lacking fiscal controls, both internally and externally, and in contract language with vendors. Keel also pointed to education service centers that failed to tag CSCOPE expenditures properly, signed contracts without sufficient protections and lacked consistent pricing for CSCOPE services and vendors, according to the Quorum Report.

At its height , CSCOPE was used in approximately 875 public, charter, and private schools in Texas. It was developed as the non-profit501(c)(3) TESCCC and its board comprised the state’s 20 education service center (ESC)executive directors, Watchdog Wire reported. They also stated that CSCOPE’s initial funding appeared to have come through the taxpayer-funded ESCs.

Education writer and retired teacher Donna Garner pointed out in her article “CSCOPE Audit Done…Grassroots Vindicated” that although the audit focused on CSCOPE’s questionable fiscal issues, CSCOPE was best known for setting off a firestorm over its content materials that were, in some cases, perceived as biased, inaccurate, impractical, ill-conceived and even anti-American. This report, however, did not examine any of that questionable curriculum content or the CSCOPE lessons, nor did it look at the “quality or validity of the curriculum management system,” stated Garner.

According to the SAO report, on September 18, 2013, the collaborative was dissolved following legislative challenges to its authority. In its place, the education service centers formed a new entity through a shared services agreement called the Texas Curriculum Management Program Cooperative (TCMPC) to facilitate the continuing management of CSCOPE, rebranded as TEKS Resource System (TRS).

The collaborative transferred all intellectual property of CSCOPE, with the exception of instructional lessons to TCMPC prior to the collaborative’s dissolution, according to Keel’s overview. However, it is still in use for a funder shared service agreements, according to Quorum Report that alsoreported its current usage hovers around 70 percent.

Another disconcerting report finding was that auditors could not verify the total amount that education service centers reported they paid for the development, installation, distribution, and marketing of CSCOPE because some of the ESCs did not separately track their CSCOPE revenue transactions.

As a result, auditors were not able to fully answer the audit objective to determine the amount of revenue and expenditures related to the development, installation, distribution, and marketing of CSCOPE, according to Red Hot Conservative blog, which also reported that auditors identified deficiencies in the processes used to procure and monitor the CSCOPE contracts.

Region 8-Mount Pleasant stood out, unable to provide its 2005 contract for the development and implementation of the curriculum management system because it destroyed all supporting documentation from the 2005-2006 school year. Auditors also identified deficiencies in Region 8-Mount Pleasant’s procurement of the CSCOPE contracts in effect from 2006-11, according to the SAO.

Auditors also couldn’t determine the total amount of rebates paid to Region 8-Mount Pleasant or the other education service centers. Region 8-Mount Pleasant was noteworthy in the report because it fell under the jurisdiction of controversial State Board of Education (SBOE) member Thomas Ratliff.

From 2006-2013, seven CSCOPE contracts were executed although auditors were unable to identify documentation showing that the ESC’s performed a best value assessment for the contracts between the Region 8 (Mount Pleasant) ESC and CSCOPE vendor National Education Resources, Inc., according to the Watchdog Wire article.

Regarding revenue reporting, the TESCCC did not always account for expenditures in compliance with internal policies and procedures and the Texas Education Agency’s financial guidelines. Specifically, of 60 expenditure transactions tested, 14 (23 percent) lacked proper approvals, 13 (22 percent) did not include adequate support for the amounts and 10 (17 percent) were not categorized in compliance with Texas Education Agency (TEA) guidance.

Other issues that surfaced in the audit were “deficiencies” with the contract between the Collaborative and National Education Services, Inc., as required by TexasEducation Code 44.031. Also, the 2o ESCs generally administered therevenues and expenditures related to the development, installation,distribution and marketing of CSCOPE, but were unable to identify allCSCOPE-related revenues and expenditures.

TEA FinancialAccountability System Resource Guide provided to the ESCs for financialguidance was not sufficient to address the programs and services they provided. CSCOPE services, including relatedfees, varied widely among the nine ESCs audited with no consistent method forcalculating the CSCOPE fees charged to the school districts, charter schoolsand private schools, according to the SAO report.

Most ESCs offered supplementalCSCOPE-related support services to participating schools such as additionaldays of training or specialized instruction. Only one of the nine ESCs auditeddid not charge additional fees for those support services. The other eight provideda variety of additional services with associated fees. For example, oneeducation service center charged $45 for one person to receive contenttraining, while another education service center charged $650 per day perpresenter for additional instruction, according to the Watchdog Wire article.

To prevent this kind of situation from every happening again, the SAO recommended that the TEA, Governor, Legislative BudgetBoard, and State Board of Education would have to give their approval before theESCs could initiate, design, or construct anything like CSCOPE again. They would be forced to document that their products are in compliance with the Texas Essential Skills & Knowledge (TEKS)required standards, the approval, auditing and documentation processes would be far more stringent

When all was said and done, Garnermay have best voiced the grassroots reaction when she wrote that the auditreport came with little surprises. uncover and discredit CSCOPE, this report vindicates their concerns,” shestated.

main thing gained from this SAO report is that the ESC/CSCOPE/TESCCC/TEKSResource System employees cannot keep practicing the arbitrary and arrogant useof our taxpayers’ dollars,” Garner added.